The Zee Entertainment stock tumbled as much as 6.45% to hit a 52-week low today after the Securities Appellate Tribunal (SAT), Mumbai, listed the matter for hearing on June 26, 2023.

The stock had opened gap-down at ₹185.30, flat as the previous session close of ₹185.30. However, during the intra-day trade, the stock plunged to its 52-week low of ₹172.25 on the Bombay Stock Exchange (BSE).

The Zee stock has suffered a blow since the SEBI (Securities and Exchange Board of India) order restricted its promoters, Essel Group chairman Subhash Chandra and his son and Zee managing director and chief executive Punit Goenka, from taking directorial roles at listed companies on June 12, 2023. The negative development led to a selling upsurge and a fall of about 11.37% in the past week. With this, the market cap of the media and entertainment behemoth has also dipped to ₹16,650.60 crore.

The negative stock reaction came a day after the market regulator listed the matter for hearing on next Monday. "The hearing has stated and is continuing. List on June 26, 2023, for further hearing," the order signed by justice Tarun Agarwala, presiding officer, SAT, said.

Before that, SEBI, in its reply to the SAT, sought "urgent action" against the promoters of Zee Entertainment Enterprises in the ₹200-crore fund diversion case to protect investors and shareholders and safeguard the company management.

The SAT on June 15, 2023, had also refused any interim relief to the said Zee promoters against an order by the SEBI, which banned them from holding a director or key managerial position in any listed company. It had asked the capital markets regulator to file a reply in the next 48 hours in response to Chandra and Goenka's appeals.

In a freshly filed affidavit to SAT, the market regulator said the promoters indulged in violations as well as multiple "false disclosures" to cover up their "wrongdoings".

"In the instant case, we have a situation before us where the Chairman Emeritus and the Managing Director and CEO of this large listed company are involved in a myriad of different schemes and transactions through which vast amounts of public money belonging to listed companies are diverted to private entities owned and controlled by these persons," the affidavit reads.

The regular said the promoters have failed to submit any evidence to prove they suffered prejudice and that they were given a personal hearing before SEBI passed the order because it was willing to give a hearing to them. SEBI's investigation was launched after Zee rejected the settlement application in the Essel Group-company Shirpur Gold Refinery (Shirpur) case. The market regulator issued an order in the case in April 2023.

The case pertains to SEBI's probe after the resignation of two independent directors (Sunil Kumar and Neharika Vohra) of Zee in November 2019 after raising concerns over several issues, including the appropriation of certain fixed deposit (FD) of ZEEL by Yes Bank Ltd (Yes Bank) for squaring off loans of related entities of Essel Group.

Follow us on Facebook, X, YouTube, Instagram and WhatsApp to never miss an update from Fortune India. To buy a copy, visit Amazon.